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Promoting Domestic Energy Production Act

To amend the Internal Revenue Code of 1986 to allow intangible drilling and development costs to be taken into account when computing adjusted financial statement income.

Introduced Jan 23, 2025

Latest action (Jan 23, 2025) Read twice and referred to the Committee on Finance.

Referred to
Finance Committee
Policy area
Taxation
Issues
Economy & Taxes

Summary
  • Amends the tax code to allow intangible drilling and development costs to be taken into account when computing adjusted financial statement income for oil and gas companies.
  • Allows depreciation and certain drilling-related expenses to reduce adjusted financial statement income to the extent they reduce taxable income.
  • Permits taxpayers to disregard certain depreciation and depletion expenses reflected on their financial statements with respect to intangible drilling and development costs.
  • Takes effect for taxable years beginning after December 31, 2025.

AI-generated plain-language summary of the bill text — neutral, and may be imperfect. See the full text below for the exact wording.

Sponsor (1)
18 cosponsors

Actions (2)
  1. Jan 23, 2025 Read twice and referred to the Committee on Finance. · senate
  2. Jan 23, 2025 Introduced in Senate

Full text

IN THE SENATE OF THE UNITED STATES

January 23, 2025

Mr. Lankford (for himself, Mr. Barrasso, Mr. Daines, Mr. Cassidy, Mr. Scott of South Carolina, Mr. Marshall, Mr. Mullin, Mr. Cruz, Mr. Cramer, Ms. Lummis, Mr. Moran, Mr. Sheehy, Mr. Risch, and Mr. Sullivan) introduced the following bill; which was read twice and referred to the Committee on Finance

A BILL

To amend the Internal Revenue Code of 1986 to allow intangible drilling and development costs to be taken into account when computing adjusted financial statement income.

Be it enacted by the Senate and House of Representatives of the United States of America in Congress assembled,

SECTION 1. SHORT TITLE.

This Act may be cited as the “Promoting Domestic Energy Production Act”.

SEC. 2. INTANGIBLE DRILLING AND DEVELOPMENT COSTS TAKEN INTO ACCOUNT FOR PURPOSES OF COMPUTING ADJUSTED FINANCIAL STATEMENT INCOME.

(a) In General.—Section 56A(c)(13) of the Internal Revenue Code of 1986 is amended—

(1) by striking subparagraph (A) and inserting the following:

“(A) reduced by—

“(i) depreciation deductions allowed under section 167 with respect to property to which section 168 applies to the extent of the amount allowed as deductions in computing taxable income for the year, and

“(ii) any deduction allowed for expenses under section 263(c) with respect to property described therein to the extent of the amount allowed as deductions in computing taxable income for the year, and”, and

(2) by striking subparagraph (B)(i) and inserting the following:

“(i) to disregard any amount of—

“(I) depreciation expense that is taken into account on the taxpayer’s applicable financial statement with respect to such property, and

“(II) depletion expense that is taken into account on the taxpayer’s applicable financial statement with respect to the intangible drilling and development costs of such property, and”.

(b) Effective Date.—The amendments made by this section shall apply to taxable years beginning after December 31, 2025. <all>

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